Say Goodbye To Credit Card Price Protection Benefits

FILE - In this March 5, 2012 file photo, consumer credit cards are posed in North Andover, Mass. Payment history is a key factor for the two major credit-scoring companies in the United States. A credit card can help one buy necessary items, but if one don’t want debt, one must pay the full amount on time. (AP Photo/Elise Amendola, File)

Several credit card companies, including Chase and Citi, have recently taken steps to remove or decrease price protection benefits for their cards. This trend may seem surprising, given that most people never take advantage of the price protection feature. What do price protection benefits offer? Why don't you use them? And why are credit card companies taking away this seemingly helpful benefit?

About Price Protection Benefits

In a nutshell, price protection benefits help cardholders take advantage of price drops on their recent purchases. For example, say you bought a $1,000 television from Wal-Mart with your Chase Sapphire Preferred card. A month later, you find that Best Buy is offering the same television for $900. Instead of feeling bad about yourself for having paid $100 more than the current price, you could submit a price protection claim form and provide supporting documentation (such as an original receipt, a monthly billing statement, and an advertisement with the lower price) to receive a price match and a $100 refund.

But not all price protection benefits are created equal and not all credit cards offer this benefit. Price protection benefits may vary based on the following:

Purchase coverage timeframe - Typical timeframes may vary from 30 to 120 days from initial purchase.

Claim limits and annual caps - Some cards have minimum and maximum claim amounts, as well as a maximum annual claim amount, in order to take advantage of price protection. For example, the Chase Sapphire Reserve card implements a limit of $500 per claim and an annual limit of $2,500.

Number of claims per year - Some cards allow an unlimited number of claims each year, but cap the amount you can claim per year, while other cards will limit the number of claims you can submit each year.

Excluded items - Some commonly excluded items include used goods, perishables, and jewelry.

Here's The Catch

While price protection sounds like a helpful feature, most credit cards place the onus on the consumer to track and request price protection refunds. The process typically requires consumers to manually monitor prices of purchased items. Tracking prices for that $0.99 pack of gum or other small purchases might not be worth your time; however, price protection can be an advantageous feature for larger purchases, which may experience more significant price fluctuations.

Enter Price Tracking Apps

Manually tracking prices of purchased items sounds painful, even if you're able to score a sizable refund. That's where apps like Earny come in. Earny, founded in 2016 and based in Santa Monica, automates the entire claim process for the consumer, from determining price adjustment eligibility, to contacting the store or credit card company that owes the price adjustment, to submitting the actual claim.

In short, price-tracking apps have turned a manual, time-consuming, and often aggravating process into an easy, automated activity that saves consumers money. Sounds like a win-win situation, right?

Unfortunately, no. The higher utilization of the price protection feature has likely resulted in more claims and more payouts - thereby increasing the cost of this benefit to card companies. The fact that several card companies plan to eliminate or decrease the price protection benefit within the next year may suggest that while card companies like to talk about all of the various card benefits available, they may not want you to actually take advantage of them.

Whether this means "goodbye" or "see you later" for the price protection feature is anyone's guess. Certainly, though, price protection will be missed.

I am a CERTIFIED FINANCIAL PLANNER™, founder of financial planning firm lifelaidout, and a NYC-based licensed real estate agent. I write extensively about personal finance and real estate on lifelaidout.com, as well as for TheStreet. I am currently a member of my co-op's Boa...